George Soros: independent Scotland would be up a creek, in currency terms

It would not be practical for an independent Scotland to keep the pound. Nor did the man who broke the Bank of England see much prospect of Alex Salmond going it alone with an independent currency. The message from the now retired guru of the financial markets was that the speculators would have a field day.

But this was not the most pressing problem for the pro-independence camp yesterday. A bigger long-term problem was the official figures showing that Scotland ran a bigger budget deficit than the rest of the UK in 2012-13, even when including the lion's share of North Sea oil and gas revenues.

True, there were mitigating circumstances. Oil production was particularly weak in 2012.

Higher investment in new fields prompted by $100 a barrel oil prices will eventually lead to higher tax receipts from the North Sea. In part, Scotland's bigger deficit can be explained by higher capital investment than in the rest of the UK: a short-term cost that should generate longer-term benefits.

But the deficit numbers are a blow for the yes camp, which has made much of the fact that Scotland has been running a lower deficit than the rest of the UK for the past five years. They illustrate how volatile North Sea revenues can be. Nor are the 2012-13 figures a one-off: receipts peaked in the late 1990s and have been declining ever since. And oil and gas revenues would make up a far bigger part of tax receipts for an independent Scotland than for the UK. So, oil plus freedom does not necessarily equal higher spending. It might well equal cuts.